Insurance Catastrophes at Dot-Coms?

DotComVictim asks: "So my girlfriend was working at Ariba until their massive (1/3) staffing cut. Turns out with all the turnover and chaos there, they never got around to filing her paperwork with the insurance companies. This is a blatant oversight, since she was working there for more than _six_ months. Now she is getting bills claiming she never had insurance. Can't this be construed as breach of contract, and open an employer up to a lawsuit? Anyone else have similar horror stories related to this, and what did you do to fix it?"

Comments

Yes it is.

[Anonymous Coward]

It is so quite clearly, and comes under several different areas:

0. She made decisions based on promises they made. They are liable for her costs.
1. She signed contracts with them explicitly (the insurance, which has something in it detailing how long you can wait to file) and they made implicit promised (that they would do what they said they would do).
2. They took out money to do this -- simple breach of contract.
3. They took out money to do this -- felony fraud.

Also, insurance costs for employees is tax deductible for the company and they kept the cash, two big accounting boo-boos. They would have to restate their audited numbers and would have to admit either gross incompetence or that they lied to the auditors. Neither is cool. And then the IRS comes, to bayonette the wounded -- they will want more money, and the company will be audited.

So, yes, she has a pretty clear case. She could even get damages.

When they said "Insurance Catastrophes"...

[unitron]

When I saw the heading about insurance catastrophes I thought it was going to be about nearly bankrupt dotcoms selling all their hardware on the black market, replacing it with old 286s and such, and hiring your friendly neighborhood arsonist.

The Open Group did this

[crow]

When The Open Group was shutting down most of their US operations back in 1998, they canceled one of their insurance plans. This was fine; people under that plan were switched to one of the others. What was a problem is that the plan was self-funded. That means that the insurance company only acted as an administrator, and the bills were paid out of an account controlled by The Open Group. So when they canceled the plan, they closed that account. This meant that a bunch of people with outstanding claims were hosed, as the insurance company wouldn't pay them, and The Open Group was operating all the benefits out of their UK office, where the concept of private health insurance isn't quite the same, to say the least.

I never heard if anyone sued, though I wouldn't be surprised. I know one friend whose bill was only about $100 just paid it to avoid the hassle, but I think someone else had several thousand in pending claims.

Check with the state

[coyote-san]

Has she checked with the state's Dept. of Labor and Employment, or whatever it's called locally?

(This assumes she was legally an employee, but if they promised insurance that seems to be a given.)

But...

[JediTrainer]

Why would this be an 'Ask Slashdot' question? Clearly, if you're wondering if this is a breach of contract, you should be speaking to a lawyer. Ask one (and pay) for an hour of their time and they'll be able to spell out for you what your options are.

This is especially true in your case because the laws will likely vary from country to country, and perhaps even from state to state. I highly doubt that any insight that I, a Canadian, might have for you would help if the person in question was working in Seattle, for example.

I wish her the best of luck, however. Certainly she deserves some explanation (and the bills to be paid), but you didn't mention if anyone tried to ask Ariba what the fsck was going on. The vast majority of Slashdot readers (all the IANAL ones, including myself) are probably not qualified to help you out. Take the wrong person's advise, and she may get screwed.

In any case, I had a similar happening with my company. When I changed divisions, my insurance was supposed to stay intact. Somehow my name got lost in a paperwork shuffle, and for a few months I was listed as not having insurance (me having found out after a trip to the dentist). A few phone calls to the insurance company and one trip to HR cleared up the mess.